Healthcare (SH:603313) HTSC·2024-12-24 05:35Investment Rating - The report maintains an "Overweight" rating for the company with a target price of 9.00 RMB [16][26]. Core Insights - The company, Dream Lily (603313 CH), is a leader in the memory foam mattress industry, with a strong presence in North America, Europe, and domestic markets. For the first three quarters of 2024, the company's revenue increased by 7.18% year-on-year to 6.13 billion RMB, while the net profit attributable to the parent company decreased by 235.47% to -150 million RMB, primarily due to a credit impairment provision of approximately 300 million RMB [11][12]. - Looking ahead, the report anticipates a recovery in demand for durable consumer goods in the U.S. as the country enters a rate-cutting cycle, which is expected to boost the housing market and related sectors in 2025. Additionally, the company is actively expanding its domestic market presence, benefiting from policies promoting home appliance upgrades [11][12]. - The company's global production capacity is leading, with unique product offerings in the domestic market, positioning it well to benefit from an industry recovery in 2025 [11][12]. Revenue and Profit Forecast - The report projects that the company's revenue will grow by 6.3% in 2024, reaching 8.48 billion RMB, and further increase by 10.8% and 8.9% in 2025 and 2026, respectively, reaching 9.39 billion RMB and 10.23 billion RMB [21][23]. - The net profit attributable to the parent company is expected to be -63 million RMB in 2024, followed by a recovery to 344 million RMB in 2025 and 461 million RMB in 2026, with corresponding EPS of -0.11 RMB, 0.60 RMB, and 0.81 RMB [14][26]. Market Performance - The report highlights that overseas revenue for the first three quarters of 2024 increased by 6.84% year-on-year to 4.91 billion RMB, with the European market performing particularly well, showing a 25.35% increase to 1.44 billion RMB. However, North American revenue decreased by 2.55% to 3.14 billion RMB, attributed to weak terminal demand [12][21]. - Domestic revenue grew by 9.5% to 1.05 billion RMB, with direct sales stores showing a significant increase of 58.91% to 140 million RMB, supported by recent government policies aimed at boosting domestic consumption [12][21]. Valuation and Estimates - The report estimates the company's 2024-2026 net profit to be -0.63 billion RMB, 3.44 billion RMB, and 4.61 billion RMB, respectively, with a target price set at 9.00 RMB based on a 15x PE ratio for 2025 [14][26].